Financial penalty associated with a decline in hospital-acquired complications in Australia

Background

Adverse events during hospital care are a global concern. The evidence for addressing unsafe acute care using pay-for-performance (p4p) is inconclusive.

Objective

To examine association between the introduction of a financial penalty on 1 July 2018 and the prevalence of 13 high-priority hospital-acquired complications (HACs) in Australian public hospitals.

Methods

Administrative data on every Australian public hospital separation (age >17 years) between 1 January 2014 and 30 June 2021 was used to analyse changes in quarterly HAC prevalence (per 1000 multi-day separations), standardized to the study population, using two interrupted time series methods: generalized least squares (GLS) with autoregressive moving average (ARMA) errors, and a Bayesian structured time series.

Results

Just under 20 million separations took place over the study period with 947,057 (4.7%) (mean age 69 (SD: 18), 48% female) recording at least one HAC and 1,263,646 HACs overall. Our GLS model estimated a decline of 17% (95% CI 12 – 22%) in HAC prevalence associated with the introduction of the penalty. The Bayesian model estimated a 26% (23 – 29%) decline. Most of the decline occurred during a 12-month roll-in period. Results suggest that 98,970 fewer inpatients experienced a HAC from 1 July 2018 to 30 June 2021 compared to the modelled counterfactual.

Conclusions

Implementation of a financial penalty was associated with a substantial decline in HACs. Few other p4p policies have been associated with reductions in inpatient harm. Future research should examine local HAC trends and investigate what other factors may have contributed to the change.